# ESMA Seeks Input on Tokenized Collateral for EU Clearing

By Riza Dagoc

Canonical URL: https://www.tokenpost.com/news/regulation/28789
Published: 2026-10-09T07:44:15.000Z
Updated: 2026-10-09T07:44:15.000Z
Section: Regulation

> The regulator is examining how tokenized assets could be transferred, protected and converted into liquidity, including after a clearing-member default.

The European Securities and Markets Authority (ESMA) is seeking input on how tokenized collateral could be transferred, protected and converted into liquidity at European Union central counterparties (CCPs), including during a clearing-member default.

ESMA published its call for evidence at 3:28:47 a.m. ET (07:28:47 UTC) on Oct. 9. Responses are due Jan. 15, 2027, and the regulator plans to assess them in the first quarter of 2027.

The review covers tokenized versions of assets held in traditional financial systems, known as “digital twins,” along with assets issued directly on distributed-ledger technology. ESMA is also examining hybrid arrangements and their interaction with tokenized cash and other settlement assets.

The regulator is asking whether CCPs could access, transfer and convert tokenized collateral into liquidity when needed. It is also examining how client protection, collateral segregation and settlement finality would work when distributed-ledger systems interact with traditional market infrastructure.

“Tokenisation has the potential to make Europe’s financial markets more efficient, integrated and innovative,” ESMA Chair Verena Ross said.

Under the existing European Market Infrastructure Regulation framework, CCP collateral must be highly liquid and carry minimal credit and market risk. CCPs stand between counterparties in cleared trades and collect collateral to manage counterparty risk.

“Collateral must be of high quality, legally enforceable, highly liquid, and easily operationally available, including in stressed conditions and following a clearing member default,” said Klaus Löber, chair of ESMA’s CCP Supervisory Committee.

Responses will be made public after the consultation ends, except when a respondent asks ESMA to keep its submission private. It will then decide whether regulatory or supervisory-convergence measures are needed after reviewing the feedback and its broader tokenization work.

The authority separately addressed whether central securities depositories may settle using tokenized central-bank money, tokenized commercial-bank money and e-money tokens in a Sept. 21 Q&A.